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The selloff in global bonds deepened as the benchmark Treasury yield hit a one-year high and debt from the UK to Australia came under pressure.

Across markets, investors are betting on a sunnier outlook for the global economy and the risk that inflation is just around the corner. In stocks, futures on the tech-heavy Nasdaq 100 Index slumped as the Russell 2000 Index of small-caps rallied.

Companies popular with the day-trader crowd are surging once again. GameStop Corp. jumped 80% and AMC Entertainment Inc. rallied 16% in early U.S. trading.

Commodities also extended gains, with investors piling into metals that can ride faster growth trends. Copper moved closer to a record high set a decade ago and aluminum touched a two-year high.

“Inflationary signals, including a surge in commodity prices, are higher than we have seen in years," said Geir Lode, head of global equities at the international business of Federated Hermes. “The prospect of a sooner-than-expected economic recovery has led to a surge in the U.S. 10-year yield."

In remarks this week, Federal Reserve Chairman Jerome Powell offered reassurance that policy would continue to be supportive and look beyond a temporary pick-up in inflation, especially from a low base.

That’s given the bond market enough reason to keep driving yields higher. The 10-year US yield adjusted for inflation rose to its highest level in more than seven months, a warning sign for riskier assets that have benefited from exceptionally loose financial conditions amid the pandemic.

Elsewhere in markets, European stocks erased an earlier gain while Asian bourses closed broadly higher. Bitcoin traded near $50,000.

These are some of the main moves in markets:

Stocks

  • Futures on the S&P 500 Index dipped 0.3% as of 7:12 a.m. New York time.
  • The Stoxx Europe 600 Index was little changed.
  • The MSCI Asia Pacific Index surged 1.3%.
  • The MSCI Emerging Market Index surged 1.2%.

Currencies

  • The Bloomberg Dollar Spot Index was little changed.
  • The euro climbed 0.5% to $1.2228.
  • The British pound was little changed at $1.4142.
  • The onshore yuan strengthened 0.1% to 6.452 per dollar.
  • The Japanese yen weakened 0.3% to 106.15 per dollar.

Bonds

  • The yield on 10-year Treasuries increased seven basis points to 1.45%.
  • The yield on two-year Treasuries climbed two basis points to 0.14%.
  • Germany’s 10-year yield climbed five basis points to -0.25%.
  • Japan’s 10-year yield climbed three basis points to 0.153%.
  • Britain’s 10-year yield advanced seven basis points to 0.804%.

Commodities

  • West Texas Intermediate crude increased 0.3% to $63.42 a barrel.
  • Brent crude climbed 0.2% to $67.19 a barrel.
  • Gold weakened 1% to $1,786.84 an ounce.

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